Mundra Ultra Mega Power Project

The Mundra Ultra Mega Power Project (also sometimes referred to as the 'Tata Ultra Mega power project') is a proposed 4000 megawatt power station currently in the early stages of being financed and built. It is one of nine Ultra Mega Power Projects by the Indian government to be built by private sector companies before 2017.

Project Details
This project is proposed to consist of five units of 800 megawatts (MW) each, using coal imported from Indonesia and elsewhere. It is located in the port city of Mundra in the state of Gujarat in India.

The Mundra Ultra Mega Power Project will sell electricity to utilities in five Indian states -- Gujarat, Rajasthan and Maharashtra in western India and Haryana and Punjab in northern India. Sales will be through 25-year take-or-page Power Purchase Agreements.

As of March 2008, projected costs cited by the International Finance Corporation (IFC), a division of the World Bank, were $4.14 billion, implying a 25-year levelised tariff of INR2.26 per kWh. Those estimates are considerably lower than estimates for other proposed supercritical plants.

According to the IFC's rationale for supporting the project, "The project is the first private sector power project in India to be based on the energy efficient supercritical technology. The use of this technology in this plant will help reduce the average Green House Gases (GHG) emissions of Indian power plants per unit of electricity generated in the country. Based on the new technology and other measures being taken by the company, the project will meet the IFC social and environmental Performance Standards. This is also IFC’s first financing of a supercritical plant anywhere in the world."

Project Details
Sponsor: Tata Power Company Limited Capacity: 4000 MW Technology: Supercritical pulverized coal Projected in service: Status:

Citizen protest
In May 2011, a group known as Machimar Adhikar Sangharsh Sangathan (MASS) filed a collective protest against the Tata Ultra Mega Power Plant project, saying there are high risks to the project without proper mitigation and accountability measures. The protest is targeted against the International Finance Corporation (IFC), the World Bank’s private sector lending arm, whose financing of high-risk coal plants in India faces community resistance. Its Compliance Advisor Ombudsman (CAO) has accepted a complaint against the Plant in Mundra, Gujarat. CAO is the independent body of IFC that handles disputes and compliance issues with its investments.

MASS says the plant is located in the special economic zone (SEZ) that cuts across fishing grounds, habitat of diverse marine lives and wide expanse of farm land, and that the project’s social impact assessment is significantly flawed, as fishing communities were excluded from the list of those directly impacted and IFC green lighted the loan without a cumulative impact assessment.

With a total project cost of US$ 4.14 billion, the IFC is investing a $450 million loan and $50 million in equity. Other financial institutions funding the project are the Export-Import Bank of Korea, Asian Development Bank, India Infrastructure Finance Co. Ltd., Housing and Urban Development Corporation Ltd., Oriental Bank of Commerce, Vijaya Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Travancore, the State Bank of Indore and other local banks.

The MASS complaint came two months after villagers in Odisha state formally challenged IFC’s funding for the GMR Kamalanga Energy Limited.

Carbon credits
On July 12, 2011, the UN ruled that the project is eligible to earn carbon credits worth $165 million at current prices. Green organisations said the U.N. rules, or methodology, were flawed and "may lead to significant overestimation of emission reductions." Mundra is the second Reliance Power project to be formally registered by the United Nations under its Clean Development Mechanism. As of July 2011, five "high-efficiency" coal power plants were registered under the CDM -- four in India and one in China -- meaning they are all eligible to earn certified emissions reductions (CERs) that they can sell.

Related SourceWatch Articles

 * India and coal
 * Ultra Mega Power Projects in India

International Finance Corporation

 * International Finance Corporation, "Tata Ultra Mega: Summary of Proposed Investment", 2008. (Additional information on the project is available under the linked tabs).
 * International Finance Corporation, "Tata Mundra Project, Mundra, India: Frequently Asked Questions", International Finance Corporation website, accessed April 2010.

Tata Power media releases on Mundra

 * Tata Power, "Tata Power acquires Coastal Gujarat Power Limited, a Special Purpose Vehicle for 4000 MW Mundra - Ultra Mega Power Project", Media release, April 23, 2007.
 * Tata Power, "Tata Power Completes the Signing of Financial Agreements for 4000 MW Ultra Mega Power Project at Mundra, Gujarat", Media Release, April 4, 2008.